USD/CAD struggling near daily lows, around 1.2870 area

   •  An uptick in the US bond yields help revive USD demand and extend some support.
   •  A modest recovery in oil prices underpins commodity-linked Loonie and capping gains.

The USD/CAD pair maintained its offered tone through the mid-European session, albeit has managed to rebound few pips from session lows.

With investors trying to look beyond trade war concerns, a goodish pickup in the US Treasury bond yields underpinned the US Dollar demand and once again helped to the pair to defend one-week old trading range support near the 1.2865-60 region. 

The pair, however, struggled to attract any strong buying interest and held weaker below the 1.2900 handle amid a modest rebound in crude oil prices, which was seen lending some support to the commodity-linked currency - Loonie. 

Looking at the technical picture, the pair has been oscillating within a broader trading range over the past one-week and hence, it would be prudent to wait for a sustained break before positioning for the pair's next leg of directional move. This week's important macroeconomic releases might act as the next big trigger and could provide the required momentum to assist the pair to break through its near-term trading range. 

In absence of any major market moving data on Tuesday, scheduled speeches by FOMC members - Minneapolis Fed President Neel Kashkari and Governor Lael Brainard, would now be looked upon for some short-term trading impetus. 

Technical levels to watch

A convincing break through the 1.2860 immediate support is likely to accelerate the fall towards the 1.2815-10 support area, below which the pair could slide further towards testing 50-day SMA support near the 1.2720 region. 

On the upside, the 1.2900 handle now seems to have emerged as an immediate resistance and any subsequent up-move might continue to confront some fresh supply near the 1.2940-50 region, which might continue to cap near-term upside.